Cantargia AB (publ)

Welcome to the Kantargia Q2 Report 2025 presentation. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the speakers. CEO Damian Marin, CFO Patrik Renvlad, and CBO Tan Burkian, please go ahead.

Hello, everybody, and welcome to this presentation today of our 2Q and first half interim report 2025. Moving straight on, we have our safe harbor statement. We are, of course, a listed company on NASDAQ Stockholm Exchange. And as has just been mentioned, you have three speakers here today, myself, interim CEO, Tom McKean, our Chief Business Officer, and Patrick Remblad, our Chief Financial Officer. So moving to the events of the second quarter and the events since the end of that period as well. In the second quarter, we appointed Morton Lind Jensen as our Chief Medical Officer. We then moved on to select Treatment-resistant atopic dermatitis is the second indication for our CAN10 phase 2 program, CAN10 being our anti-IL-1 antibody for immune inflammatory disorders. We also announced that the pharmacokinetic modeling of CAN10 confirmed the choice of every four-week dosing in phase 2, coming from our first in-human study that has been running for some time and is now nearing its end. Also importantly, during the quarter, the US FDA awarded to Naginolimab, our most advanced product in oncology, a fast track designation for the treatment of patients expressing high levels of IL-1 RAP in combination with chemotherapy to treat patients with PDAC, pancreatic ductal adenocarcinoma. Finally, we signed a loan facility of 50 million Swedish krone that to provide us with extra flexibility as we held deal discussions, which I'm sure everybody now knows about. And in fact, the first significant event after the reporting period was indeed that we announced that Totsuka Pharmaceutical had acquired CanTen for an upfront of US$33 million, plus an additional US$580 million in potential milestone payments and an out on future sales. That deal is expected to close in Q3 2025, and Tom will give you further details as we go through the presentation. We also announced preliminary results from the TRIFOR Phase 2 study in TMVC. They showed that we did not demonstrate in the second part of this study a difference in the overall response rate between naginolimab in combination with chemotherapy and the reference group on chemotherapy alone. That study continues on and we will have overall survival data around the end of this year. And I'll say a few more words about that as well as we get further into the presentation. And finally, we announced on Monday evening this week that we'd appointed Dr. Hildegard Steininger as our new CEO effective from September the 1st, 2025. So indeed, this will be my last results call with you. And in future, you will be hearing from Hilda and the team. And we're absolutely delighted to have Hilda on board, it has to be said. And I will give you a bit more on Hilda's background later in the presentation. Moving down to just a few words on CanTen and why CanTen is such an interesting product and became the subject of our transaction with Otsuka. So Cam10 provides a really a unique opportunity to block IL-1 superfamily signaling across multiple diseases and multiple therapy areas. The IL-1 family of ligands and receptors is associated with acute and chronic inflammation. And there's very strong evidence of IL-1 family cytokines. That's IL-1, alpha and beta, IL-33. and IL-36 alpha, beta, and gamma, driving multiple different inflammatory diseases. What's been seen in the clinic to date is that individual blockade of these IL-1 family members has resulted in a degree of efficacy, but probably not the sort of efficacy that you really want to see across diverse immune inflammatory diseases. And we really believe that CANTEN's broader mechanism can be highly relevant treatment of such diseases, be they dermatological, fibrotic, cardiovascular, or even others in various barrier tissues in the respiratory tract, for instance, or in joints and in the intestine. So there really is a huge potential for this mechanism and for CAN10. As I mentioned a few moments ago, we've been conducting a first in human study for some time, single ascending dose and then multiple ascending dose. We completed the single ascending dose a while ago, 10 different cohorts, and moved on into the multiple ascending dose, where we have performed two dose cohorts in healthy volunteers, controlled by placebo, where we gave subcutaneous doses on day one and seven, then every 14 days. And this study is the study that will allow us to move into phase two. they, or I say us, to move into phase two, as it now is, it will be, of course, Otsuka who will be handling that following the transaction with them. What we have shown is that we can achieve full IL-1 occupancy on different immune cells and that we have complete blockade of IL-1 family cytokines. We also, of course, very importantly, have seen no safety concerns. And as I mentioned, our pharmacokinetic results support for weekly dosing. We have a linear PK profile with high bioavailability, and the simulations performed on all patients we have treated show that we can stay above the minimum level that we need to occupy all the receptors and block those cytokines over a period of four weeks. So that leads us to the transaction with Otsuka. And I'll hand you over here to our CBO, Tom Burkeen, to tell you more about that. Over to you, Tom.

You may not be unmuted, Tom.

Thank you, Damian. Obviously, very happy to tell you a little bit about the Otsuka deal. Obviously, and as mentioned, we are very pleased of having this agreement signed with Otsuka on our content program. And I think it's fair to say that the team of Contagio has done a great job to get this over the finish line in an environment which is actually quite challenging with respect to dealmaking. For some context, for the ones who are not very familiar of Otsuka, Otsuka is a Japanese well-established pharmaceutical company, mainly active in CNS and oncology, but where the company has, in particular, immunology strongly earmarked as a growth area. And as you will see, Otsuka has been on a strong growth trajectory over the last couple of years to focus on the growth in immunology. So as for the transaction, as we communicated mid-July, the transaction is structured as an asset transaction, which includes the rights to Canton, which is our phase one program and a preclinical backup. Otsuka will have the rights, obviously, but also the obligations to develop, to register and commercialize the programs. And as Damian already alluded to, the financials include in 33 million upfront, complemented with 580 million dollars in milestone payments, making the total deal value of 630 million. The earn out payments are, of course, on top of that, and they will end up as tiered up to double digit payments. As mentioned, also, of course, touching upon the dual rational beyond the established franchises as oncology and CNS, Otsuka has strongly commercialization and BD focus on immunology and connective tissue disorders for which they have products on the market or very close to commercialization. So indications you can think of of interest can include, of course, large indications such as rheumatoid arthritis or atopic dermatitis, but also smaller specialty indications such as systemic sclerosis or lupus, for instance. And besides the short-term revenue generators that OTSUKA has, OTSUKA has also been building an early and mid-stage clinical pipeline of growth programs. as you can see of course on the slide as well the ladder is mainly driven by a various number of bd activities over the last couple of years where the company has acquired a number of companies to build up antibody platform competences from 2018 on as well as know-how of course and have acquired a number of antibody programs including canton of course to fill the pipeline, the early stage pipeline, to move that towards commercialization. And we believe that OTSUKA has interest in looking maybe further into follow-up programs. That's why we have a potential option in the agreement where OTSUKA can follow Contagia's efforts and potentially have the rights to maybe additional programs, which of course for Contagia brings perspective also for the near-term future. So for Contagia, it was of essence to have a partner with the ambitions to develop Cantan as broad as possible, as the indications that you could see on the previous slide, which we believe, of course, supports our mechanism of action. So with that brief growth strategy overview and explaining high level the deal rationale, I will hand over and then back to Damien for further updates.

Many thanks, Tom. And let me second your thanks to our team and yourself for really bringing this deal through and against a very challenging background, as you said. You know, that really is a fantastic achievement. And, you know, we're really all looking forward to working with Otsuka to take content forward. But of course, we do have the rest of our portfolio. And I'm going to say a few words now about news on Naginolimab in the last quarter. We're talking first about the TRI-4 preliminary results. The first and very important thing to say in this first controlled data set that we've generated with Naginolimab is that we see no signal of added toxicity when adding Naginolimab to chemotherapy. So that's a very important and positive finding for us. We saw a very similar ORR, overall response rate, that is, in both the R-mitinogenonimab and in the reference chemotherapy-only arms. Both arms report slightly higher than historical benchmark for these types of patients, but this is data that we have to live with. We have subgroup analyses ongoing. And obviously, we made the overall survival data, and it's important to say that in triple negative breast cancer, which obviously is what the TRIFOR study was in. Now, overall response rates are not necessarily indicative of what you will see in overall survival. This is the case in many cancer indications, and it's definitely the case here. So we do await these overall survival data with great interest. And in the meantime, of course, just not to over-interpret these top-line data. And finally, I should say that the safety data I mentioned is supportive of our development across indications such as, of course, PDAC, which is our lead indication of an adenoma, but also in other indications, particularly other indications like PDAC are very sensitive to IL-1 RAP. What we also achieved in Q2 was a fast track designation in PDAC. So this was granted by the FDA on the basis of the data that we have generated to date and granted for the treatment of patients with metastatic PDAC who have high L1 RAP expression levels and for the treatment of those patients with nagenolimab in combination with chemotherapy. This reflects a very high medical need in metastatic PDAC where there have not been any new product approvals for a long time. and it also reflects, we believe, the strength and interest of the data that we've generated to date. Importantly, it also facilitates further development of Naginolimab with more frequent interactions with the FDA and eligibility for accelerated approval and priority review as we go forward. We also have, of course, our platform CanXX, and during the quarter we also released some very interesting data from the platform. So CanXX as a platform overall offers multiple development opportunities to create products such as antibody drug conjugates, ADCs, and bispecific compound antibodies as well. And that is both for immunology and for oncology. We have a library of over 200 anti-IL-1 wrap antibodies within this platform that can serve as a source of new drug candidates, and we're very excited about the potential to do so. In terms of looking at oncology, both chemotherapy and existing ADCs induce IL-1 in tumors, which can lead to chemoresistance and blocking IL-1 pathways, as we know that our anti-IL-1 wrap antibodies can do, therefore means we could get better efficacy of chemotherapy agents and ADCs. And we have published this data showing an IL-1 wrap targeting antibody drug conjugate. It targets both the tumor cells and the microenvironment around the tumor. And what we were able to see was that conjugating the drug, the chemotherapeutic toxin to our IL-1RAP antibody did not reduce our binding to IL-1RAP. So that's very important. And we saw very good efficacy in different in vivo models here. So this is clearly something which can be of great interest as we go forward. we also have in the platform antibodies that have full blocking activity like canten that we have just transacted around with otsuka as you've heard but also antibodies that can block only certain parts of the il-1 mediated pathways if we want which means we can generate antibodies that deepen or widen the il-1 family blocking in inflammation so we have Lots of exciting opportunities here to continue to build our inflammatory and oncology platform as we move forward. Now to the appointment of our new CEO. So we're absolutely delighted that we have been able to appoint Dr. Hilda Steininger as our new CEO. That's going to be effective from September the 1st. Hilda has great experience as a biotech executive, but also a proven track record across financial analysis in the life sciences, involved in the founding and running of a life science venture capital firm, and also in business development. Hilda is a two-time CEO. She joins Cantarget from North Sea Therapeutics, where she has been the co-founder and chief operating officer since 2017. as well at the same time being the CEO of Staten Biotechnology during that same period. And there Hilde led a $480 million deal with Novo Nordisk. So Hilde will be our CEO to lead us on from the Otsuka transaction and to continue to build value with Naginolimap and with our platform. I have had the most wonderful time in the last seven months as the CEO of Kantarga as the interim CEO. But it was always intended that I would step down and move back to the board. And that is what is now going to happen. And I'm really looking forward to supporting Hilda and our dedicated and talented team as they take Kantarga forward. So now let's take a quick look at our milestones. So in Q3, well, already in this year, we've had, you know, a lot of milestones already achieved. The initial phase one MAD results, we had phase two MAD results as well. Around count 10 and the closing of the OTSUKA transaction will be in Q3. We achieved the PDAC fast track designation. We've obviously spoken about Triforce. And we also started a study with the MD Anderson Cancer Center in Texas, US, around AML. And we will have other new preclinical and translational results coming through during the rest of this year. So we will continue to have an extensive news flow right through 2025. Now, I'll hand you over to Patrick Remblad, our CFO, to take you through the financial results. Patrick.

Thank you, Damien. So in the second quarter, we, of course, had a lot of focus on the Otsuka transaction and preparing, getting ready for that. But in parallel or while doing that, our teams were focused on continuing the development of Can10 and adenolumab and the preclinical portfolio. And you can see that as there is not really a change in activity between the second quarter this year and the previous comparison period. Just a 10% reduction in our overall operating expenses. Slightly below also for R&D. The quarters increase in admin expenses is a result of the activities around the Yotsuka transaction. The same applies when we look at the first six months, basically no change, no surprises happening there with a slightly increase in our administrative expenses as I alluded to for the Yotsuka transaction and the organizations that we have had on the staff of the company. We had 82 million of cash by the end of the second quarter after a cash outflow of 44. We, of course, are looking forward to actually the first time in the company's history to recognize revenue and receive non-dilutive funding here in the third quarter. And when we do that, we intend to repay the short-term loan that we obtained, as Damien alluded to, to secure the short-term operations and our negotiation with So we intend to repay that and be on a very much more stable financial position than we were before. With that, I hand back over to you, Damien.

Thank you, Patrick. So as you've seen, we've had a very busy Q2 and immediate period just after. Q2, a momentous time for the company with the Otsuka transaction and with the appointment of Hilda Steininger as our new permanent CEO to lead the company forward. So with that, I will say thank you to everybody and we are now open for questions.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad.

The next question comes from Richard Romanious from Red Eye. Please go ahead.

Good afternoon. I have a few questions. Starting where you left off in your presentation, could you comment on the possibility of generating income from the Can-10 deal through clinical milestones? And could you say approximately when such a milestone, the first of such milestones could be received?

Thanks, Richard, for your question. Unfortunately, no, we cannot divulge that information. We have agreed with Otsuka when we released the details when the transaction was signed that we would release the level of detail that we did at that time, and we would give no further details on that. So unfortunately, I can't give you any timing on when we're likely to receive a development milestone.

sure sure i get it um what about the remaining costs for the phase one study um who will pay for that and when exactly does uh over um content i'll ask perhaps tom and uh patrick to comment on that one

Yeah, sure. I can do that. Well, obviously, we are in a period that we work towards the finalization of the transaction. Obviously, we signed it on the 15th of July. So from that point, Otsuka will take over all the costs of progressing the program. With respect to the timing of how they pursue the studies further, that's obviously in Otsuka's hands. We cannot state anything on that irrespective of whether we knew it or not. Again, we are finalizing this project and, of course, maintain to be in contact with Otsuka on practicalities around the deal, of course, and support them where we're needed. And that is what we also have agreed in the agreement.

Yeah, and it's Patrick here. I think, Richard, that the deal overall is that Totsuka takes over the responsibility and the cost from closing. So from Q4, basically, we shouldn't have any cost for the canton.

Okay, I understand. My last question. How will the TRIFO results affect the future plans for Nadirinolimab? And maybe I should add, do you have to wait for the full readout before you really decide the next step with Nadirinolimab? Thanks, Richard.

Yeah. Yes, indeed. We will wait for the full results, but not before deciding the next steps at Naginolimab, but certainly before deciding the next steps of what we might do in TMBC. As I mentioned, the safety data is very strong, and that actually encourages us to move forward in those other indications, PDAC particularly, where we see this very strong association. between high R1 RAP, Nigenolimab treatment and benefit to patients, and indeed patients whose prognosis is normally worse when they express high R1 RAP. So to that extent, the data from TRIFOR has no instance on our thinking other than we're very happy that the safety data makes us believe that Nigenolimab will be a very well-tolerated product and we expect to be active in PDAC.

Great. Thanks for answering my questions. You're welcome, Richard.

Thank you.

The next question comes from Louisa Morgado from Van Lanchet Kempen. Please go ahead.

Hi, Tim. Thank you for taking my questions. Maybe to start off, for the triple negative breast cancer program, What should we take as a benchmark here for the survival data? Are you looking to top the chemo combination alone of the rate of 11 months, or shall we compare those to the drugs in development? Also here for the TRIFOR study, did you pre-specify this subgroup analysis? And if so, can you tell us on which parameters? Thank you.

Thanks a lot, Louisa. And thank you for your question. So in terms of what we would look to see, obviously, we would want to see for overall survival and improvement over the reference chemotherapy arm alone, that's for sure. In terms of the strategic thinking, if you do see that, first of all, then yes, of course, you're then going to benchmark that against what is happening in what is quite a fast-changing field to see whether you think that the result that we get is competitive. that comparison can only be made once we see the result, once we see whether the result is different from what we've seen already. In other words, that in overall survival, we are looking better than the reference group. And then we will look, as I say, to see where our competitive position is in that overall landscape. And in terms of subgroup analyses, which particular subgroup analysis might you be referring to there, Luisa?

Not sure, but I thought that you had mentioned earlier that there would be some subgroup data to be shared also before year end.

that is absolutely true we did indeed yes okay thanks i thought you might have had a specific um analysis no no no no no okay no no uh yes we have a a number of subgroup analyses going on uh that were pre-specified and they're being uh you know worked through um and yes we will expect to provide data on those um you know that may be at a scientific conference in it or it may be that we will make an announcement about that but that work is still ongoing

uh okay perfect and then maybe one last question uh on the appointment of dr hilda as ceo uh just wondering which of her strengths here are you looking to add to sort of guide cantarga's strategy for well the coming time yeah i think uh you know what we're looking at is that hilda has a very uh broad um you know and deep

experience, you know, when you think that she's a very experienced biotech executive and leader, a very strong and inspiring leader. You add to that strong business development skills, that she's been a financial analyst, that she has also worked in venture capital and has a wide range of contacts throughout the investment industry and the industry in general. that overall profile is exactly the sort of profile that we want um as a board of the company um to take the company forward so you know we're absolutely delighted that hilda is excited and enthusiastic to join us and take the company forward okay perfect thank you so much you're welcome

There are no more questions at this time. So I hand the conference back to the speakers for any written questions and any closing comments.

Yeah, there's a couple of written questions. And the first one relates to suspected systematic market manipulation of the share where observers have seen that someone is trying to push down the share price at the end of each trading day. Do you have any insights to this?

No, we can't really comment on that. So that's the simple answer.

Thanks. And the second one is regarding the Otsuka deal. Is anything else apart from Ken10 and pre-G5 included? And what about other antibodies that you study and might turn out to have more advantageous properties than Ken10?

Thanks. Tom, would you like to answer that?

yeah of course uh well thank you for the question a very relevant one uh no the the the deal with osuka is canton and 3g5 the agreement also provides us flexibility in developing of course in the areas that we would like to develop that of course includes immunology and oncology oncology more related to of course our can4 program As mentioned, we also would like to give Otsuka some insights in what we want to establish. That's why we, of course, also included an option for a period of two years. So Otsuka, if they see something that they like, we definitely will continue the discussion and potentially, of course, act upon it. But that is subject, of course, to what we are going to develop from our CanXX platform. But obviously, as I mentioned, Otsuka is very interested in building up an immunology franchise. And I think that is very much in line also what we would like to establish in or through our CanXX platform. Besides, of course, potential other opportunities that may arise.

Thank you. That was all the written questions. I hand back to Damien. Damian, if you could unmute yourself.

Thank you, Jonas. Yes, thank you indeed, Jonas. Yeah, so as I was saying, thank you to everybody. Thank you for your time and your attention today to listen to this presentation. Thank you for the questions. And we are always open to receiving questions from our shareholders and of course our analysts as well. And as a final word, I would just like to say it really has been an enormous privilege and pleasure to have led CanTarget these past seven months. I thank everybody within the team, the board, and all the shareholders who support Kentucky. Thank you very much. And I'm looking forward to remaining, of course, in touch with the company on the board and to watching Hilda and the team take the company to new heights. Thank you very much. Goodbye.